Exhibit 10.1
VIRGIN MEDIA INC.
909
Third Avenue
New
York, New York 10022
18
December 2007
Mr. Jacques
Kerrest
c/o Virgin Media
Inc.
909 Third
Avenue
New York, New York
10022
Dear
Jacques:
As we have discussed,
we are pleased to extend the term of your Employment Agreement as
described below. The terms of your Employment Agreement will
remain in effect in all respects, except as
follows:
1.
Assignment to new Virgin Media
Inc.
As a result of the
merger with Telewest Global, Inc. being structured as a
reverse acquisition, the former NTL Incorporated changed its name
to NTL Holdings Inc. and subsequently changed its name to Virgin
Media Holdings Inc. (“Old NTL”) and the former Telewest
changed its name to NTL Incorporated and subsequently changed its
name to Virgin Media Inc. (the “Company”). We
agree that your Employment Agreement with Old NTL shall be assigned
to and assumed by the Company and in this connection:
(i)
all references to the
“Company” in the Employment Agreement now refer to the
Company instead of Old NTL;
(ii)
all obligations of Old NTL
under the Employment Agreement are assumed by the Company, and all
claims that you may have against Old NTL or the Company shall be
asserted solely against the Company; and
(iii)
all obligations of the
Executive owed to Old NTL or the Company under the Employment
Agreement shall be enforceable against the Executive by the
Company.
2.
Extension
(a)
Notwithstanding anything
to the contrary in Section 7 of the Employment Agreement, the
Executive’s Employment Term is extended to December 31,
2008; provided , however, on or after March 31, 2008,
upon a Termination Without Cause, a Constructive Termination
Without Cause or a Termination upon Non-Renewal, the Company shall,
within 90 days after the date of such Termination, provided
that the Executive executes and delivers to the Company the general
release of claims set forth in Section 7(e) of the
Employment Agreement (the “Release”) and, the Executive
does not revoke the
Release prior to the
expiration of any applicable revocation period, cause the Executive
to be paid a lump-sum severance payment of cash (the
“Severance Payment Amount”) equal to fifteen calendar
months of Base Salary.
(b)
At any time on or after
March 1, 2008, the Executive may terminate his employment on
30 days’ written notice to the Company and the Company shall,
within 90 days after the date of such termination, provided
that the Executive executes and delivers to the Company the Release
and, the Executive does not revoke the Release prior to the
expiration of any applicable revocation period, cause the Executive
to be paid the Severance Payment Amount.
(c)
The Company shall, in its
discretion, determine the exact date of payment of the severance
amounts described in (a) and (b) above.
3.
Expatriate
Package
The
following paragraph shall be added to the end of
Section 3(c) of the Employment Agreement:
Any such reimbursement
shall be made in accordance with the Company’s Tax
Equalization Policy, but shall be made not later than the end of
the second taxable year of Executive beginning after the later of
(i) the taxable year of Executive in which Executive’s
U.S. federal income tax return is required to be filed (including
any extensions), reflecting the compensation for which the tax
equalization payment is provided, or (ii) the taxable year of
Executive in which Executive’s foreign tax return or payment
is required to be filed or made, reflecting the compensation for
which the tax utilization payment is provided.
4.
Section 409A and
280G
The following
paragraphs shall be added as Sections 7(h) and (i) to the
Employment Agreement:
(h)
Effect of
Section 409A of the Internal Revenue Code
. If the Executive
is a “specified employee” on the date of termination of
the Executive’s employment for purposes of Section 409A
of the Internal Revenue Code of 1986, as amended, and the
regulations thereunder (the “ Code ”),
notwithstanding any
provision of the Agreement relating to the timing of payments to
the Executive hereunder, if Section 409A would cause the
imposition of the additional tax under Section 409A if paid as
provided in Section 7 of the Agreement, then as much of the
severance payment as may be paid without the imposition of the
additional tax shall be paid in a lump sum as aforesaid, and any
remaining portion of the severance payment shall be paid upon the
day following the six-month anniversary of the date of
termination. For purposes of this Agreement, “
Specified Employee ” shall mean a “specified
employee” within the meaning of Code section
409A(a)(2)(B)(i), as determined by the Company’s Compensation
Committee.
(i)
Effect of
Section 280G of the Internal Revenue Code
. (i) Anything
in this Agreement to the contrary notwithstanding, in the event
that it is determined by the Company and its US tax advisors that any payment (other than the Gross-Up
Payments (as defined below) provided for in this
Section 7 ) or distribution by the Company or any of
its affiliates to or for the benefit of the Executive, whether paid
or payable or distributed or distributable pursuant to the terms of
this Agreement or otherwise pursuant to or by reason of any other
agreement, policy, plan, program or arrangement, including, without
limitation, any stock option, performance share, performance unit,
stock appreciation right or similar right, or the lapse or
termination of any restriction on or the vesting or exercisability
of any of the foregoing (a “ Payment ”), would
be subject to the excise tax imposed by Section 4999 of the
Code (or any successor provision thereto), by reason of being
considered “contingent on a change in ownership or
control” of the Company, within the meaning of
Section 280G of the Code (or any successor provision thereto)
or to any similar tax imposed by state or local law, or any
interest or penalties with respect to such tax (such tax or taxes,
together with any such interest and penalties, being hereinafter
collectively referred to as the “ Excise Tax ”),
then the Executive will be entitled to receive an additional
payment or payments (collectively, a “ Gross-Up
Payment ”). The Gross-Up Payment will be in an
amount such that, after payment by the Executive of all taxes
(including any interest or penalties imposed with respect to such
taxes), including any Excise Tax imposed upon the Gross-Up Payment,
the Executive retains an amount of the Gross-Up Payment equal to
the Excise Tax imposed upon the Payment. For purposes of
determining the amount of the Gross-Up Payment, the Executive will
be considered to pay (x) federal income taxes at the highest
rate in effect in the year in which the Gross-Up Payment will be
made and (y) state and local income taxes at the highest rate
in effect in the state or locality in which the Gross-Up Payment
would be subject to state or local tax, net of the maximum
reduction in federal income tax that could be obtained from
deduction of such state and local taxes. Any Gross-Up Payment shall be paid by
the Company to the Executive at the same time as the associated
Payment, or as soon thereafter as is practical, but in all cases,
within 25 days of the receipt of notice from the Executive that
there has been a Payment. As a result of the uncertainty in
the application of Section 4999 of the Code at the time of the
initial determination of the Company, it is possible that Gross-Up
Payments which will not have been made by the Company should have
been made (“ Underpayment ”). In the event
the Company exhausts or does not seek to pursue its remedies
pursuant to Section 7(i)(ii) and the Executive
thereafter is required to make a payment of any Excise Tax, the
Company and its US tax advisors, or at the Executive’s
election and expense, a nationally recognized accounting firm to be
appointed by the Executive, shall determine the amount of
Underpayment that has occurred. If the Executive elects to
have a nationally recognized accounting firm determine the amount
of any Underpayment, detailed supporting calculations of such
determination shall be provided to the Company. Any such
Underpayment shall be paid by the Company to or for the benefit of
the Executive as promptly as practicable.
(ii)
Executive shall notify the
Company in writing of any claim by the Internal Revenue Service
that, if successful, would require the payment by the Company of
the Gross-Up Payment. Such notification shall be given as
soon as practicable but no later than ten (10) business days
after Executive is informed in writing of such claim and shall
apprise the Company of the nature of the claim and the date on
which such claim is requested to be paid. Executive shall not
pay such claim prior to the expiration of the 30-day period
following the date on which he gives such notice to the Company (or
such shorter period ending on the date that any payment of taxes
with respect to such claim is due). If the Company notifies
Executive in writing prior to the expiration of such period that it
desires to contest such claim, Executive shall:
(a)
give the Company any
information reasonably requested by the Company relating to such
claim,
(b)
take such action in
connection with contesting such claim as the Company shall
reasonably request in writing from time to time, including, without
limitation, accepting legal representation with respect to such
claim by an attorney reasonably selected by the Company,
(c)
cooperate with the Company
in good faith in order effectively to contest such claim,
and
(d)
permit the Company to
participate in any proceedings relating to such claim; provided,
however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in
connection with such contest and shall indemnify and hold Executive
harmless, on an after-tax basis, for any Excise Tax or income tax
(including interest and penalties with respect thereto) imposed as
a result of such representation and payment of costs and expenses.
Without limitation on the foregoing provisions of this
Section 7(i)(ii) , the Company shall control all
proceedings taken in connection with such contest and, at its sole
option, may pursue or forgo any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in
respect of such claim and may, at its sole option, either direct
Executive to pay the tax claimed and sue for a refund or to contest
the claim in any permissible manner, and Executive agrees to
prosecute such contest to a determination before any administrative
tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as the Company shall determine; provided,
however, that if the Company directs Executive to pay such claim
and sue for a refund, the Company shall advance the amount of such
payment to Executive, on an interest-free basis, and shall
indemnify and hold Executive harmless, on an after-tax basis, from
any Excise Tax or income tax (including interest or penalties with
respect thereto) imposed with respect to such advance or with
respect to any imputed income with respect to such advance; and
further provided that any extension of the statute of
limitations
relating to payment of
taxes for the taxable year of Executive with respect to which such
contested amount is claimed to be due is limited solely to such
contested amount. Furthermore, the Company’s control of the
contest shall be limited to issues with respect to which a Gross-Up
Payment would be payable hereunder and Executive shall be entitled
to settle or contest, as the case may be, any other issue raised by
the Internal Revenue Service or any other taxing
authority.
(iii)
Notwithstanding any other
provision of this Agreement, the Company may, in its sole
discretion, withhold and pay over to the Internal Revenue Service
or any other applicable taxing authority, for the benefit of the
Executive, all or any portion of any Gross-Up Payment, and the
Executive hereby consents to such withholding.
(iv)
If Executive becomes
entitled to receive any refund with respect to any Gross-Up Payment
or with respect to an amount advanced by the Compan
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